Recently I bought a Sanza Fuze. Largely because I wanted an audio player, and not a locked-pocket-computer that happens to play music. What I learned from the experience is that touch sucks as a universal interface.
0) It is not always obvious what gestures to make to have the device perform a certain action. For something that I will pull out many times and interact with while doing something else, I should never have to think about how to do something.
1) In the cases where there are multiple gestures one can make at one screen, it is very often that you will make the wrong one or the machine will interpret your gesture incorrectly. This sucks. Having to memorize gestures brings us back to the era where most applications were navigated by keyboard shortcut. (In fact, I would prefer the keyboard shortcuts. At least those are non-ambiguous.)
2) Touch screens are quite possibly the best way invented by man to smudge display hardware. Even when a touchscreen has been forgone in favor of a touch pad below the display. Between greasy, sticky, food, dirty hands, and just plain wear, I basically have to constantly damage my display to interact with the device. Which is why most people end up getting a case. (Case-hell is its own subject really.)
3) Specifically for the case of video games, there is nothing more frustrating then the interface effecting your ability to play the game. Considering that the latency of wireless controllers is considered too much by the most hardcore of gamers, it stands to reason that touch interface will be universally looked down upon by anyone playing anything more complex than say; wii bowling.
Addressing your concept of a touch pad on the back to save the poor screen. Your forgetting that most people hold mobile devices in such a way that a touch pad on the back would be constantly triggered simply by holding the device with a firm grip. (And encouraging people to hold it with anything less is a bad idea considering how fragile they are.)
I expect buttons to be around for a long time to come.